Eason & Anor v Skeggs Beef Ltd

A special insolvency rule governing out-of-hours notice of an administrator’s appointment by a qualifying floating charge holder cannot be overridden by a general civil-procedure practice direction. The two regimes operate in parallel; the practice direction may supplement, but not displace, the Insolvency (England and Wales) Rules 2016. Filing the prescribed notice in the wrong manner is a non-fundamental defect, rather than a nullity. Under rule 12.64, the court asks whether substantial injustice was caused and, if so, whether it can be remedied. Where the defect is purely formal and causes no injustice, the appointment remains valid.

The joint administrators of Skeggs Beef Limited applied under paragraph 63 of Schedule B1 to the Insolvency Act 1986 for declarations that their appointment was valid and effective from 5:03 pm on 10 September 2019, and that their acts were not invalidated.

The qualifying floating charge holders filed the notice after the court had closed, using electronic filing under Practice Direction 51O rather than the out-of-hours procedure in rules 3.20 and 3.21 of the Insolvency (England and Wales) Rules 2016. The central issues were whether that defect made the appointment void and whether it could be addressed under rule 12.64.

1. Declarations. The court granted declarations that the administrators’ appointment was valid and took effect at 5:03 pm on 10 September 2019. Their acts could not be invalidated merely because the notice had been filed defectively.
2. Interaction between the regimes. The Insolvency (England and Wales) Rules 2016 provide a specific out-of-hours filing regime for appointments by qualifying floating charge holders. Practice Direction 51O is a separate form of secondary legislation. It cannot override the Insolvency Rules, although it may supplement them where there is no inconsistency. The only proper route for an out-of-hours appointment notice was therefore compliance with rule 3.20.
3. Earlier authority. The judge considered Re HMV Ecommerce Ltd, [2019] EWHC 903 (Ch). In that case the law had been treated as ambiguous in relation to appointments by companies or directors. Having regard to the fuller legislative history, the judge held that the general electronic filing regime could not supply an out-of-court procedure absent from the Insolvency Rules.
4. Defect and remedy. The court identified three categories: a fundamental defect, which makes the purported appointment a nullity; a non-fundamental defect causing no substantial injustice, which does not invalidate the proceedings; and a non-fundamental defect causing substantial injustice, which may be cured by an appropriate order under rule 12.64. The case law distinguished failure to use the prescribed form from use of the prescribed form in the wrong manner. The present defect fell into the latter category. It was purely formal and caused no injustice. No remedial order beyond the declarations was required.